Peace for now - but at a heavy cost

Mar 09 2010

We know that the private sector has borne the brunt of the recession. We also know that whoever forms the next Government will have to cut spending to ease the vast and growing deficit. So quite how Royal Mail has agreed to a seriously generous pay deal for its workers is astounding. A 6.9 per cent pay rise over 3 years, combined with shorter hours and bonus payments upwards of a grand would be a package to behold even if the business wasn’t in trouble, facing a pensions crisis and losing big customers like Amazon.

But is it a price worth paying for peace? Well, no, not really. The Department for Business, Innovation and Skills – or whatever it happened to be called at the time – clearly thought that privatisation of several of Royal Mail’s key services was the right move. But a fudged attempt at a sort of, not really but almost, part-privatisation flopped and was quickly shelved. No doubt the department couldn’t be honest about the changes it actually wanted to make, with the spectre of the union looming in the background. When politics gets in the way of passing good legislation – of which all parties are guilty – there are millions of people who lose out: those who use the service. This is an expensive deal that maintains the status quo, until either the management do something that the unions don’t like, or the management fail to deliver the change that they promise to.

The struggle between the unions and the management of Royal Mail over the last couple of years has been made all the more unedifying as the interests of customers were left out of the debate. Management were told to make the business more efficient and modernise. Workers wanted better pay deals and favourable timetables. Queues outside parcel depots and late mail played second fiddle to this battle. Moves towards privatisation are seen as akin to selling the Crown Jewels, but examples in Europe show us that the real winner is the customer: delivery rates pick up and services improve.

There seems to be another nasty in the deal too; one that may not be as important in the long-term performance and future of Royal Mail, but certainly one that will no doubt annoy millions of people on a daily basis. Buried somewhere near the back of the agreement is the pledge to remove the restrictions on the delivery of junk-mail. Royal Mail challenged this, saying that other businesses “might” deliver less of it, and they “hope” to take the business of other companies. Forget the hopes and mights: this means that people can expect to find take-away menus, advertisements and possibly more pointless council literature on their doormat when they get home from work. Just a little something to make a poor service even worse.

We know that the private sector has borne the brunt of the recession. We also know that whoever forms the next Government will have to cut spending to ease the vast and growing deficit. So quite how Royal Mail has agreed to a seriously generous pay deal for its workers is astounding. A 6.9 per cent pay rise over 3 years, combined with shorter hours and bonus payments upwards of a grand would be a package to behold even if the business wasn’t in trouble, facing a pensions crisis and losing big customers like Amazon.

But is it a price worth paying for peace? Well, no, not really. The Department for Business, Innovation and Skills – or whatever it happened to be called at the time – clearly thought that privatisation of several of Royal Mail’s key services was the right move. But a fudged attempt at a sort of, not really but almost, part-privatisation flopped and was quickly shelved. No doubt the department couldn’t be honest about the changes it actually wanted to make, with the spectre of the union looming in the background. When politics gets in the way of passing good legislation – of which all parties are guilty – there are millions of people who lose out: those who use the service. This is an expensive deal that maintains the status quo, until either the management do something that the unions don’t like, or the management fail to deliver the change that they promise to.

The struggle between the unions and the management of Royal Mail over the last couple of years has been made all the more unedifying as the interests of customers were left out of the debate. Management were told to make the business more efficient and modernise. Workers wanted better pay deals and favourable timetables. Queues outside parcel depots and late mail played second fiddle to this battle. Moves towards privatisation are seen as akin to selling the Crown Jewels, but examples in Europe show us that the real winner is the customer: delivery rates pick up and services improve.

There seems to be another nasty in the deal too; one that may not be as important in the long-term performance and future of Royal Mail, but certainly one that will no doubt annoy millions of people on a daily basis. Buried somewhere near the back of the agreement is the pledge to remove the restrictions on the delivery of junk-mail. Royal Mail challenged this, saying that other businesses “might” deliver less of it, and they “hope” to take the business of other companies. Forget the hopes and mights: this means that people can expect to find take-away menus, advertisements and possibly more pointless council literature on their doormat when they get home from work. Just a little something to make a poor service even worse.